Saudi Arabia scraps Kafala system, empowers expats with digital labour reforms

Saudi Arabia has abolished the Kafala system and introduced sweeping labour reforms to protect expatriate workers. Through platforms like 'Qiwa' and the 'Wage Protection Programme', employment contracts are now digitised, transparent, and regulated. Workers can switch jobs or return home after contract expiry, and wage delays can trigger job mobility.

By Gulf Correspondent

Dubai: Saudi Arabia has introduced a comprehensive legal framework to protect the rights of expatriate workers with implementation of significant regulatory amendments to strengthen the worker-employer relationship.

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Notable among the changes is the abolition of the traditional Kafala (sponsorship) system and its replacement with the contractual relationship through digital platforms such as ‘Qiwa’ and ‘Wage Protection Program’.

Earlier, the sponsor or employer could terminate the contract and sack the employee and also the expat could be sent back to his home country abruptly. However, with new changes it is no longer an easy task. An employee is free to switch to another job or return to his or her home country within a certain time following the end of the contract.

However, many Indians are unsure of whether they could switch jobs whenever they want. They could do so but only after the expiry of the contract with the employer.

‘Qiwa’ became a popular tool among workers, which is the only channel for mandatory formalisation of employment contracts written with a fixed term. If a term is not explicitly stated, the law defaults to a one-year duration, renewable automatically. This offers much-needed transparency, minimises disputes and ensures that employers and employees operate with mutual understanding and legal safeguards.

After completing the term, an employee can move to another employer or return home and this regulation is being branded as a ‘game changer’. Also, it has given employees an option for notice period if they intend to quit the job as well as to employers for termination.

‘Qiwa’ connects employers and employees through a digital system where job offers and contracts are issued, reviewed, and signed online. Once accepted, contracts are directly linked to the Ministry of Human Resources database—ensuring full transparency and compliance. It ensures full transparency for employer and employee without any hidden clauses.

“Wage Protection Program,” an electronic system monitors wage disbursements for workers in the private sector. If an employee does not receive salary on time, he or she has the option to switch jobs. This drastic change has brought cheer to numerous foreign workers in the country.